Daily Brief China: China Shenhua Energy Co H, Soho China, CALB, A8 New Media, CIFI Holdings and more

• There could be up to 6 changes to the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance, mainly driven by the deletions.
• If there are six changes to the index, estimated one-way turnover is 6.47% and will result in a one-way trade of HK$4,124m.
• There is large short interest on quite a lot of stocks and will play an important role in the rebalance.

• Pan Shiyi and Pan Zhangxin – Chairman and CEO respectively of SOHO China (410 HK) – have tendered their resignations, with immediate effect. 
• Both are resigning “to focus on supporting the arts and philanthropic pursuits“.
• That sounds like a “donation” is on the cards. And the Pans selling their stake in SOHO China would nicely fund that donation.

• CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
• In CALB IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.  
• The key elements of the bear case rest on its small scale, low profitability and high FCF burn compared to listed peers.   

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute. 
• These insights may also flag those companies where shares have been pledged, both recently and ongoing. Stocks mentioned include A8 New Media (800 HK) and China Fordoo Holdings (2399 HK).

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China SCE
• CIFI Holdings